FIN 501 Lecture Notes - Lecture 3: Fidelity Investments, Target Date Fund, Registered Retirement Savings Plan
Document Summary
Chapter 4 and 5 overview of security types and mutual funds. T-bills, bank certificates of deposit, corporate and municipal money market instruments: known future payment, except when the borrower doesn"t pay. Sold on a discount basis and only the interest rates are quoted. Fixed-income securities: longer-term debt obligations of corporations and governments: promise to make fixed payments according to a pre-set schedule. U. s. treasury notes, corporate bonds, car loans, student loans. Fixed coupon payments and final payment at maturity, except when borrower doesn"t pay: possibility of gain/loss from fall/rise in interest rates, depending on the debt issue, illiquidity can be a problem. Illiquidity means that you might not be able to sell securities quickly for their current mv. Common stock: represents ownership in a corporation: a part owner receives a pro-rated share of whatever is left over after all obligations have been met in the event of a liquidation, ex.
